THE chairman of agricultural insurance company, FBD Holdings, has castigated the "compensation culture" and the high incidence of uninsured motorists.

In order to address these growing problems, the group wants liability laws to be rationalised and the establishment of a separate agency to pursue car tax evasion.

Chairman, Dr Patrick O'Keeffe, said growing public liability claims are now "endemic in Irish society" and warned that "ambulance chasing" was reaching US proportions.

Uninsured drivers cost the industry £25.4 million last year, a 22 per cent rise on 1994. And he reckons this works out as an additional cost of £26 a car, paid on each insurance premium. This compares with a loading of just £4 a car in Britain.

Addressing shareholders at yesterday's annual general meeting in Dublin, Dr O'Keeffe warned that the cost of public liability claims continued to grow to unprecedented levels.

Claim settlements and awards in Ireland "are escalating still further ahead of levels in other EU states, imposing increased cost burdens on Irish business and on Irish consumers"

He expressed the hope that the report being prepared for the Government on the costs and competitiveness of Irish insurance would put forward positive concrete proposals to rationalise liability laws and temper the costs of litigation.

Turning to the high level of uninsured drivers, he said there was an obvious case for better law enforcement and that a new and radical approach was necessary "to tackle the high cost and flagrant breach of law by uninsured drivers".

Dr O'Keeffe argued that a separate agency should be formed to tackle the problems.

Conceding that the insurance industry might be asked to participate or even to contribute to such an agency, he said the "present loss to the State and the cost to the individual is too much to be ignored".

However, he stressed that "the authorities" also had to redouble their efforts to reduce the carnage on the roads.

Despite the problems in the industry, FBD, which also has property interests, increased its pre-tax profit by 4.8 per cent to £13.96 million in 1995 and all divisions contributed to the growth.